Frequently Asked Questions about economic inequality and coverage
What is economic inequality?
Economic inequality is the disproportionate share of income and wealth in the United States. It is a problem that dates back many decades and has been steadily growing.
Economic inequality is comprised of two things: income inequality and wealth inequality. According to the U.S. Census Bureau, the income gap specifically pertains to the amount of money a household earns in a given year. Wealth inequality is similar to the income gap. It is an unequal distribution of resources among America’s classes. Resources include assets like houses, cars, retirement accounts and unsold stocks.
How do I convince my community to care?
Solutions-based coverage gives your audience hope and allows them to take informed action. Michael Norton, professor of business administration at Harvard Business Law, believes you must give people the next step after reading the article or watching the report. He suggests linking to your state senator’s website or providing information of organizations that are trying to create change.
Columbia Missourian Metro Editor John Schneller recommends journalists, “get beyond the usual suspects” and get to the, “real-world person” to put a face to the problem of economic inequality. Localizing economic inequality and finding local sources requires journalists to analyze and understand their area. They must live in it, participate in events and get to know the citizens.
How do I encourage audience participation in my newsroom’s coverage of economic inequality?
Scott Swafford at the Columbia Missourian reminds us to be open to all voices and sources because every socio economic group feels the effects of economic inequality. Some ways to do that are to host town halls meetings, create community event calendars, put posters up with newsroom contact information so citizens can publicize news and updates.
Why should the one percent care?
No single income group exists in a vacuum, so every income group needs a functioning society in order to maintain a stable economic position. Historically, periods of time when more Americans had higher incomes were periods of faster economic growth. Concentrating wealth also leads to lower overall demand in the economy. Finally, economies require trust. If people believe the one percent are out to get them or that the system is stacked against them, that trust will fade and the economy and society will be destabilized.
Economic inequality is the disproportionate share of income and wealth in the United States. It is a problem that dates back many decades and has been steadily growing.
Economic inequality is comprised of two things: income inequality and wealth inequality. According to the U.S. Census Bureau, the income gap specifically pertains to the amount of money a household earns in a given year. Wealth inequality is similar to the income gap. It is an unequal distribution of resources among America’s classes. Resources include assets like houses, cars, retirement accounts and unsold stocks.
How do I convince my community to care?
Solutions-based coverage gives your audience hope and allows them to take informed action. Michael Norton, professor of business administration at Harvard Business Law, believes you must give people the next step after reading the article or watching the report. He suggests linking to your state senator’s website or providing information of organizations that are trying to create change.
Columbia Missourian Metro Editor John Schneller recommends journalists, “get beyond the usual suspects” and get to the, “real-world person” to put a face to the problem of economic inequality. Localizing economic inequality and finding local sources requires journalists to analyze and understand their area. They must live in it, participate in events and get to know the citizens.
How do I encourage audience participation in my newsroom’s coverage of economic inequality?
Scott Swafford at the Columbia Missourian reminds us to be open to all voices and sources because every socio economic group feels the effects of economic inequality. Some ways to do that are to host town halls meetings, create community event calendars, put posters up with newsroom contact information so citizens can publicize news and updates.
Why should the one percent care?
No single income group exists in a vacuum, so every income group needs a functioning society in order to maintain a stable economic position. Historically, periods of time when more Americans had higher incomes were periods of faster economic growth. Concentrating wealth also leads to lower overall demand in the economy. Finally, economies require trust. If people believe the one percent are out to get them or that the system is stacked against them, that trust will fade and the economy and society will be destabilized.
How does economic inequality affect social mobility?
The increase in economic inequality in recent decades has coincided with a decline in “social fluidity,” but there is little evidence suggesting that they are related. However, there is a widening gap between investments in children made by families of different income levels and “a child’s family income plays a dominant role in determining his or her future income, and those who start out poor are likely to remain poor.”
The increase in economic inequality in recent decades has coincided with a decline in “social fluidity,” but there is little evidence suggesting that they are related. However, there is a widening gap between investments in children made by families of different income levels and “a child’s family income plays a dominant role in determining his or her future income, and those who start out poor are likely to remain poor.”
What factors contribute to economic inequality?
- Superstar Treatment of Executives: Economists say that the Superstar Treatment of executives severely widened the income gap. Economist Paul Krugman said this is because since the 1980s companies have placed a high emphasis on leadership and at times treated CEOs like saviors.
- Education Gap: Standard and Poor’s suggests that the main reason for income inequality is a growing education gap between the rich and poor. Jobs that require post-secondary education typically pay more than double that of jobs that require a high school diploma or less training. Jobs that required post-secondary training paid 3.5 times more than jobs require a high school diploma or less in 2010, according to S&P.
- Income Gap: Standard and Poor’s said that income inequality is bad for the economy because: “Aside from the extreme economic swings, such income imbalances tend to dampen social mobility and produce a less-educated workforce that can't compete in a changing global economy. This diminishes future income prospects and potential long-term growth.” Federal Reserve Chairwoman Janett Yellen also said in October that because of this, the growing income gap may be "un-American" and is something the Fed needs to address soon.
- Wealth Gap: From 2000 to 2011, the wealth gap between America’s richest classes and poorest class also increased significantly. The wealth gap between the highest 20 percent of earners and lowest 20 percent of earners more than doubled between 2000 and 2011, according to the U.S. Census Bureau. Net worth of households in the top 20 percent also increased by $61,379 from 2000 to 2011, while net worth of households in the bottom 20 percent decreased by $5,124.
How is economic inequality measured?
The most common measurement used is the Gini Coefficient, which measures inequality as a distribution. The Gini Coefficient is measured on a scale of 0 to 1 where 0 represents a perfectly equal distribution and 1 represents a perfectly unequal distribution.
The most common measurement used is the Gini Coefficient, which measures inequality as a distribution. The Gini Coefficient is measured on a scale of 0 to 1 where 0 represents a perfectly equal distribution and 1 represents a perfectly unequal distribution.
What caused the 2008 recession, and how does it relate to economic inequality?
A major cause of the 2008 recession was the unequal accumulation of debt across income levels. When the housing bubble burst, this distribution of debt led to a greater number of home foreclosures. Deregulation led to the securitization of riskier loans and resulted in more loans being made to people with low credit scores.
How do patterns of consumption affect the economy?
The recent rise in economic inequality has not been matched by rising consumption inequality. However, economic inequality does lead to less purchasing power for lower income groups, which leads to lower demand and less overall consumption, and less demand for investment by higher income groups.
How have wages stagnated?
The typical male’s annual salary in 2011 was $32,986. In 1968, it was $33,880 (adjusted for inflation). Since 2004, productivity has increased by nearly 30 percent but average hourly wages have increased by less than ten percent, with no sustained growth since 2004.
Why is economic inequality bad for the economy?
Overall, economic inequality decreases social mobility, decreases overall economic growth, and leads to a less educated work force. Standard and Poor’s says income inequality hurts the economy because, “Aside from the extreme economic swings, such income imbalances tend to dampen social mobility and produce a less-educated workforce that can't compete in a changing global economy. This diminishes future income prospects and potential long-term growth.”
Why should I care?
Economic inequality has many adverse consequences that affect people at all income levels. It can prevent economic growth, social mobility and create market instability. For people “on the wrong side of the economic divide,” there are fewer opportunities.
How can I explain economic inequality in a way that everyone in my community can understand?
Explaining economic inequality seems like a daunting and time-consuming task, but with the help of this guide and an understanding of the research already done it is easy to apply what you know to your everyday reporting. Our site seeks to condense the history of economic inequality so you can explain it in plain language to your readers and viewers. For example, see this graphic created by the Economic Policy Institute in 2013. It is interactive, informative and offers solutions. These are important themes to keep in mind when covering the income gap.
A major cause of the 2008 recession was the unequal accumulation of debt across income levels. When the housing bubble burst, this distribution of debt led to a greater number of home foreclosures. Deregulation led to the securitization of riskier loans and resulted in more loans being made to people with low credit scores.
How do patterns of consumption affect the economy?
The recent rise in economic inequality has not been matched by rising consumption inequality. However, economic inequality does lead to less purchasing power for lower income groups, which leads to lower demand and less overall consumption, and less demand for investment by higher income groups.
How have wages stagnated?
The typical male’s annual salary in 2011 was $32,986. In 1968, it was $33,880 (adjusted for inflation). Since 2004, productivity has increased by nearly 30 percent but average hourly wages have increased by less than ten percent, with no sustained growth since 2004.
Why is economic inequality bad for the economy?
Overall, economic inequality decreases social mobility, decreases overall economic growth, and leads to a less educated work force. Standard and Poor’s says income inequality hurts the economy because, “Aside from the extreme economic swings, such income imbalances tend to dampen social mobility and produce a less-educated workforce that can't compete in a changing global economy. This diminishes future income prospects and potential long-term growth.”
Why should I care?
Economic inequality has many adverse consequences that affect people at all income levels. It can prevent economic growth, social mobility and create market instability. For people “on the wrong side of the economic divide,” there are fewer opportunities.
How can I explain economic inequality in a way that everyone in my community can understand?
Explaining economic inequality seems like a daunting and time-consuming task, but with the help of this guide and an understanding of the research already done it is easy to apply what you know to your everyday reporting. Our site seeks to condense the history of economic inequality so you can explain it in plain language to your readers and viewers. For example, see this graphic created by the Economic Policy Institute in 2013. It is interactive, informative and offers solutions. These are important themes to keep in mind when covering the income gap.